Pipeline Testing & Maintenance

In order to maintain a safe, reliable pipeline system, Vectren’s integrity management program
is a process for assessing and mitigating pipeline risks in order to reduce both the likelihood
and consequences of incidents. The Pipeline Safety Improvement Act of 2002 is federal legislation
that addresses risk analysis and integrity management programs for pipeline operators and directs
the U.S. Department of Transportation (DOT) to adopt regulations on integrity management.
DOT finalized these regulations in 2004. Natural gas transmission pipeline operators are
required to have written programs in place and baseline assessments of pipe in high consequence
areas must be inspected every seven years.

Vectren has implemented an integrity management program for pipelines in its high consequence
areas according to the DOT regulations. It is a systematic, comprehensive process designed to
provide information to effectively allocate resources for appropriate prevention, detection and
mitigation activities. The program builds on an existing foundation of pipeline safety regulations
covering design, construction, testing, operation and maintenance that has been in place for many years.

The basic steps in the integrity management process are:

High Consequence Area (HCA) Identification - Locations along the pipeline system meeting the criteria for High Consequence Areas are identified. Generally, these are high population density areas, difficult to evacuate facilities such as hospitals or schools, and locations where people congregate such as churches, office buildings, prison or playgrounds.

Threat identification and risk assessment - Information about the pipeline segments is evaluated to identify threats to the pipe and assess potential risks. An assessment schedule is generated based on potential risks.

Integrity assessment - The pipe segments are assessed according to the schedule and methods identified in the Baseline Assessment Plan (BAP). There are three primary assessment methods:

Inline inspection - an inspection tool (often called a "smart pig") is run internally through the pipeline to evaluate the pipe condition.

Pressure test - the pipe is pressured above its normal operating limit to test the strength of the pipe. Water is usually used to pressure the pipe during the test.

Direct Assessment - a structured, multi-step evaluation is conducted to identify potential problem areas. Pipe at these locations is excavated, examined and remediated if necessary.

Remediation - Potential integrity concerns identified during the integrity assessment are evaluated and actions are taken to eliminate the problems.

Preventive and mitigative measures - along with performing the integrity assessments on pipe segments, the process calls for implementing additional measures to prevent or mitigate potential problems before they occur such as keeping the pipeline right-of-way clear and installing pipeline marker posts to name a few.

Continual evaluation and assessment - A continuing plan to evaluate the integrity of the pipeline after completing the baseline assessment is also part of the process. The ongoing plan includes reviewing updated information about the pipe, analyzing potential risks, and performing reassessments at regular intervals.

Safe and reliable service is Vectren’s primary concern. The integrity management program is an
important part of Vectren’s efforts toward achieving that goal.